Monday, January 11, 2010

Why Andrew Cuomo Has It All Wrong

New York's attorney general, Andrew Cuomo, asked eight major U.S. banks to turn over data on planned bonuses for 2009.

Cuomo made the demand Monday to the banks that were first to receive federal bailout money in the fall of 2008: Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs Group, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo.

This all makes grand headlines for Cuomo's inevitable runs for NYC mayor, NY governor and, eventually, president. But instead of grandstanding over private contracts, he should really be investigating just how much money and in what ways it was pumped into these banks in the first place by the federal government, and he should try an determine if any money could have been made to pay bonuses if money wasn't shoveled to these banks by the Treasury and the Fed .

Just what kind of paper has the Federal Reserve been buying from these banks? In recent securities trades between the Federal Reserve and these banks, how long did the banks hold these securities before selling them off, and what kind of profit did they make?

That's how you get to the bottom of the shenanigans, not by focusing on the bonuses. That's interfering with private commerce. The real dirty deeds were done before the bonus money was available. It was done by the banks, the Treasury and the Federal Reserve.

Andrew, as attorney general, your persons of interest should be Lloyd Blankfein, Neal Kashkari, Timothy Geithner, Henry Paulson and Ben Bernanke. Do you want to take the fast track to the White House? Lock these criminals up.

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